Which condition exists at a price of $1? A) Surplus B) Stable market C) Equilibrium D) Shortage

Understand the Problem

The question is asking which economic condition is present when the price of a good is set at $1. It lists different possibilities such as surplus, stable market, equilibrium, and shortage, and we need to determine which one correctly describes the situation at that price.

Answer

Shortage

The final answer is D) Shortage

Answer for screen readers

The final answer is D) Shortage

More Information

At a price of $1, there is a shortage because the quantity demanded exceeds the quantity supplied. A shortage means the price is below the equilibrium, causing more demand than can be fulfilled with available supply.

Tips

Common mistakes include assuming a surplus when a price is lower than expected. Remember, a low price typically results in a shortage due to increased demand.

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